Morgan's Harbour is a high-risk investment in a declining tourism market and requires the unequivocal support of Government if it is to be a long-term success.

And the Morgan's Harbour Partnership, the group behind the development of the former US Naval Annex, will only commit to the investment with Government's backing.

The news came yesterday in a document received by The Royal Gazette and follows on the heels of Wednesday's warning from Shadow Tourism Minister David Dodwell, who told the House of Assembly during the Budget debate that if Government insisted in having low-cost housing put on the former Base land, then the investors backing the fund would pull out.

Spokespersons from Morgan's Harbour Investment Limited and the WEST*GROUP -- the two parties believed to be in the make up of the Morgan's Harbour Partnership -- could not be reached for comment last night.

Already included in plans for the site are the construction of up to 339 homes over a seven-year period, all of which would be available to Bermudians first, the document reports.

Each property is on the waterfront making the project the first large scale release of waterfront property in Bermuda. Only if they were not bought by Bermudians would the partnership look for overseas buyers.

The document notes if these homes are purchased, others on the Island would become available as people traded up.

The project offers other benefits including the creation of about 160-short term and 360-long term jobs, small business opportunities and job training programmes for construction workers.

These small business opportunities created by Morgan's Harbour include ferries; water-taxis, water sports, cycle hire, catering services, landscape design and maintenance, housekeeping and security services, store and restaurant operators.

Investment would have Island-wide spinoffs Tourism would get a boost from a new five-star hotel, golf course and marina at the site, plus the introduction of other amenities and activities.

The growth of international business would be supported by the creation of the homes, the formation of new decentralised office space and the construction of the hotel.

The Bermuda Land Development Company would receive a substantial source of income, thus reducing the need for Government subsidies and some $86 million in taxes would be generated over the next 20 years.

The project would showcase inward investment in the Country, give a big vote of confidence in the new Government and enhance Bermuda's investment climate, the document states.

And it would create stability in the construction industry as other large projects such as the Waterfront and EXEL developments wind down.

The site presents massive challenges however, including up-front investment worth $41.5 million before it is even in a workable state for development.

Such investment would be required no matter what project is developed at Morgan's Point.

The document shows that $90 million would be invested by Morgan's Harbour to build the launch phase of the project which will include a marketable mix of amenities for potential tourists and homeowners and will be spent before market demand is fully demonstrated.

To date, two years of work and $3.5 million has gone into the project in order to fully assess the feasibility of the entire project, analyse potential risks, undertake public consultations and obtain planning approvals and attract a high-calibre financial partner.

DEVELOPMENT FACTS Development facts Construction at the site alone promises to generate significant on-Island revenue and create many small business start-up opportunities, a document leaked to The Royal Gazette yesterday shows: Over the estimated seven-year construction period, a total of $243 million in construction-related expenditure will be invested in the site, by the Morgan's Harbour Partnership. This will represent a significant proportion of the construction market on-Island over this period.

Some $72 million will go into the two-year launch phase for the project and $18 million a year will go into the seven-year residential project which will see the construction of up to 339 homes, depending on market demand.

Phase two construction will see the formation of a $10-million marina and a $35-million hotel, the document shows. More than 50 percent of this expenditure will be placed with local sub-contractors. Beside the huge amount of cash flow the project will generate, some 200 personnel will be employed for the launch phase of the project.